Ukraine starts denunciation of Double Taxation Agreement with Russia – Finance Ministry

The Government of Ukraine has approved by its decision a draft law on the denunciation of the agreement with the Russian government on the avoidance of double taxation of income and property and the prevention of tax evasion dated February 8, 1995, ratified by the Verkhovna Rada on October 6, 1995.

"The purpose of the bill is to denounce the international agreement with the aggressor state in connection with the introduction of martial law in Ukraine and to ensure the protection of national interests and national security of Ukraine," the Finance Ministry said in a statement.

According to it, in this way, the provision of preferential taxation conditions to residents of Russia operating in Ukraine will be terminated. "After the denunciation of the Agreement, all income of residents of the Russian Federation received from sources in Ukraine will be subject to a general tax rate of 15% established by the Tax Code of Ukraine, instead of preferential rates established by the Agreement: some 5% for dividends; some 10% or 0% for interest; some 10% for royalties," the ministry said.

According to it, today Ukrainian residents operating in Russia can pay taxes there without paying them in Ukraine, and after the denunciation, they will no longer have such an opportunity.

In addition, the denunciation will release Ukraine from its obligations to exchange information with Russia on tax issues.

Source: www.en.interfax.com.ua